Toyota: Our Ads Spur Laughs, Not Insurance Fraud

A group that combats auto insurance fraud said it has asked Toyota to pull television ads it feels encourage such crime, but the manufacturer says the commercials won't have that effect and it won't put the brakes on them.

The complaint to the car maker was made by Dennis Jay, executive director of the Coalition Against Insurance Fraud, concerning spots that suggest owners are destroying their cars so they will have a reason to buy a new one.

Mr. Jay wrote that he wanted to "express deep concern about Toyota's television advertising campaign," which carries the tag line, "Something strange happens to people at this time of year." Mr. Jay said "we fear it sends the wrong signal to Americans and unwittingly encourages people to commit insurance fraud."

Among the spots are people portrayed rolling a boulder off a cliff onto a car, and another shoving one off the top deck of a parking garage.

In a letter to Shige Hayakawa, president of Toyota North America, Mr. Jay wrote: "A common and costly insurance crime is called the 'owner give-up.' In one frequent version, owners deliberately destroy their vehicle so they can obtain a new one. They make the wreck appear to be an accident so insurance money will pay for the upgrade. When that happens, the cost to insure a car rises for everyone--including Toyota owners."

Mr. Jay went on to write that "Toyota's ads encourage this crime by showing amusing and memorable scenes of people wrecking their vehicles to obtain a newer model. The unspoken but clear message is that insurance will pay for the replacement."

The letter went on further to suggest that "trivializing owner give-ups on national television helps teach millions of Americans that committing fraud is an easy, acceptable and even enjoyable way to move up in the world."

In a separate letter, David J. Rioux, president of the International Association of Special Investigation Units, also urged Toyota to "abandon this campaign...to avoid unintentionally bolstering the misconception that fraud is acceptable..."

Mr. Rioux, who is also vice president and manager of corporate security and investigative Services at Erie Insurance, said that "while Toyota surely does not intend to encourage deliberate destruction of vehicles--with the unspoken implication that insurance will pay for a new one--this new series of commercials may inadvertently do so"

Mr. Rioux said that "nearly 25 percent of Americans say it's okay to defraud insurers. Fraud is a costly problem that results in higher premiums. In fact, some industry experts estimate that about 10 percent of your auto insurance premium pays for the cost of fraud."

Cindy Knight, speaking for Toyota motor sales, said the company is aware of the Coalition's concern, but the legal department of the firm's advertising agency felt there was no connection in the commercials to auto fraud, and they were "not to be taken literally."

She said the company will not abandon the campaign, as Mr. Jay requested, because the spots will only be airing for a few more days, and Toyota thinks that when they are viewed, "people hopefully are going to have a laugh."

As for the idea that the ads would provoke people to commit fraud, she said: "Our marketers and legal people don't think people are that impressionable. If they were, we'd have a lot easier time selling them cars."

(This story was updated on Dec. 21 at 3:35 p.m. EST.)